Hungary

Despite the fact that it was the first country in Eastern Europe to adopt International Monetary Fund prescriptions in 1982 and that it was more highly developed than its neighbours when it embraced a market economy, Hungary is now the weakest economy in the region. The reasons for this are manifold and have led the country to waver between potential social upheaval – if a change of direction is not made – and the total collapse of a very vulnerable economy. The phantom of right-wing extremism lurks in the background, fed by popular discontent.
The global crisis has pushed Hungary into the worst economic decline in almost two decades. It was partially responsible for the resignation of Premier Ferenc Gyucsany earlier this year. The export-dependent economy has suffered from the slowdown of its main commercial partners. The social system is crippled by corruption, the national currency has plunged and public finances are heavily burdened by pension obligations. The new Premier plans to cut pensions, public sector bonuses and maternity support; to mortgage energy and transport subsidies; and to raise the age for retirement.
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